Pennsylvania Real Estate Market Outlook
The Keystone State’s real estate market is currently in the ruins. Philadelphia’s sluggish home sales are bruising the economy much to the disappointment of investors who gambled in the local market a few years back. Until 2006, the property market had jumped in the construction bandwagon where only a few became skeptical with the boom. It was after all the peak of the market and subprime mortgages haven’t responded with their backlash against the industry. Then came the credit crisis that sent borrowers surrendering their keys for foreclosure. This year, there will still be less activity in the market.
In Philadelphia, changes are afoot in the market’s condition as the housing market continues to deteriorate. Businesses are also feeling the pain of the recession and are expected to increase job cuts throughout the year. This slowdown is observed among the retail, manufacturing and financial and insurance companies in the area. As unemployment becomes more difficult to curtail, the majority of borrowers will be most likely to default in their payments. This year, Philadelphia’s average home values will sink by 9 percent.
Pittsburgh’s home sales volume is reflective of the devastation by the financial epidemic. Single-family home units remain vacant amidst the bargain prices in the market. The government is ready to bend over backwards but the buyer turnout can’t be repaired by artificial demand. It’s an inevitable market reaction that is set to remain in 2009. Pittsburgh’s economy is also retreating with the troubled balance sheets of FedEx, Allegheny Technologies and U.S. Steel in a recessionary economy.
Allentown is the archetypal property market overdrive after the real estate boom went down. Slowing home sales are just a drop in a bucket as the rising foreclosures are sending a wave of market fears. In 2006, five casino projects were granted to operate up to 5,000 slot machines each to generate tourism activity in the city. Now, revenues couldn’t keep the rate to break even with the construction alone in the south side of Bethlehem. With no optimism in the construction industry, RealtyOutlook.com forecasts an 11 percent depreciation in Allentown’s home values.
In Lancaster, unemployment persists in the manufacturing and electronic firms. Businesses were severely hurt by the weak consumer appetite for goods that would have usually been disposed at larger quantities. Clearly, as the recession takes over what used to be a burgeoning business landscape, Lancaster’s economy will be even more crippled this year. Not to be spared is the housing sector that is currently depressed by a high rate of foreclosures. RealtyOutlook.com expects home values in the area to fall down by 7 percent.
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